ZACKS·2026-01-14 17:06Core Insights - The comparison between Realty Income (O) and Prologis (PLD) is not merely about income versus growth, as both are high-quality REITs tailored for different investor needs [1][2][3] Realty Income Overview - Realty Income's strength lies in its durable business model, owning over 15,500 properties leased to more than 1,600 tenants across 92 industries, with a portfolio occupancy rate close to 99% [4] - The company has invested approximately $1.4 billion in Q3 2025, raising its full-year investment guidance to around $6 billion, with a significant focus on Europe and strategic partnerships [5] - Realty Income declared its 133rd monthly dividend increase in 2025, showcasing its reliability as an income generator supported by long lease terms and high-quality tenants [6] - However, growth is measured, with same-store revenue gains being steady but limited, and the net lease structure capping upside potential in stronger economies [7] Prologis Overview - Prologis is positioned at the center of global logistics, with nearly 62 million square feet of leases signed in Q3 2025, leading to a portfolio occupancy of about 95.3% and strong rent growth [8] - The company increased its full-year development starts outlook to as much as $3.25 billion, with over half of development tied to build-to-suit projects for large global customers [9][10] - Prologis is expanding beyond traditional warehouses, securing 5.2 gigawatts of power for data centers, which aligns with growth in cloud computing and digital infrastructure [11] - The company maintains a strong balance sheet with an in-place cost of debt around 3.2% and an average debt maturity of over eight years, allowing for investment through cycles [12] Financial Estimates Comparison - The Zacks Consensus Estimate for Realty Income's 2025 and 2026 sales implies year-over-year growth of 8.49% and 7.48%, respectively, with FFO per share growth of only 1.67% and 3.69% [14] - For Prologis, the 2025 and 2026 sales estimates suggest year-over-year growth of 8.72% and 6.30%, with FFO per share growth of 4.32% and 4.72% [17] Stock Performance and Valuation - Over the past six months, Realty Income shares have risen 4.5%, while Prologis stock has increased by 19.9%, outperforming the S&P 500's 14.8% gain [20] - Realty Income is trading at a forward price-to-FFO of 13.38X, above its three-year median, while Prologis is at 21.37X, also above its three-year median of 20.86X [20] Conclusion - Realty Income is ideal for investors seeking steady income and low volatility, while Prologis offers financial strength and exposure to long-term growth drivers in logistics and digital infrastructure [22] - Prologis is viewed as the stronger investment option currently, with a Zacks Rank of 2 (Buy) compared to Realty Income's 3 (Hold) [23]